Secretary's Certificate as Proof of Corporate Authority in Philippine Litigation

The Supreme Court recently settled two important points of procedure that frequently trip up litigants: what proof a corporation needs to show that its officer is authorized to file a case, and who bears the blame when a case sits idle for years. In LBL Industries, Inc. v. City of Lapu-Lapu (G.R. No. 201760, September 16, 2013), the Court ruled that a secretary's certificate can be enough to prove an officer's authority, and that a plaintiff cannot be faulted for delay when the court itself fails to act.

The Facts of the Case

LBL Industries, Inc. owned a 40,634-square meter lot in Mactan, Lapu-Lapu City. In January 2006, the City of Lapu-Lapu filed an expropriation case to take a portion of the property for a road project. The city later amended its complaint to increase the area sought to 2,750 square meters.

After depositing 15% of the property's fair market value, the city took possession. The trial court issued two orders directing the issuance of a writ of possession, but the branch clerk of court failed to comply with either order.

Nearly two years later, in January 2008, LBL moved to dismiss the case for the city's alleged failure to prosecute. The trial court denied the motion, noting that LBL's own motion for a joint survey and pre-trial setting had not yet been resolved. The court also cited LBL's violation of the three-day notice rule.

LBL then filed a petition for certiorari with the Court of Appeals. The appellate court dismissed the petition on technical grounds, including the lack of a board resolution showing that LBL's Chief Operating Officer, Roberto Sison, was authorized to represent the corporation.

The Issue: Is a Secretary's Certificate Sufficient Proof of Authority?

The Supreme Court held that it is. Citing Vicar International Construction, Inc. v. FEB Leasing and Finance Corp., the Court explained that a secretary's certificate reflecting a board resolution authorizing an officer to represent the corporation is sufficient proof of that authority. The certificate itself, not the underlying board resolution, is the operative document.

In this case, LBL's assistant corporate secretary executed a certificate on April 12, 2011, stating that the board had authorized Sison to represent the corporation in the expropriation case. The Court found this sufficient. The Court of Appeals therefore erred in dismissing the petition on this ground.

The Second Issue: Who Is Responsible for Delay in Prosecution?

The Court also addressed whether the trial court erred in denying LBL's motion to dismiss for the city's failure to prosecute.

Under Section 1, Rule 18 of the Rules of Court, the plaintiff must promptly move ex parte to set the case for pre-trial after the last pleading is filed. The Court noted that this rule was later supplemented by guidelines issued by the Court En Banc, effective August 16, 2004, which give the plaintiff five days from the filing of the reply to move for pre-trial. If the plaintiff fails to do so, the duty falls on the branch clerk of court to issue a notice of pre-trial. The specific issuance number is not available in the ASG law library, but the Court applied these guidelines in this case.

Here, LBL itself had already moved for a joint survey and pre-trial setting. The city reasonably waited for the trial court to resolve that motion. The Court found that the delay was due to the clerk of court's failure to act and the trial court's failure to resolve pending motions—not the city's fault.

Practical Takeaways

• A secretary's certificate can prove corporate authority. A corporation need not attach the full board resolution to every pleading; a certificate from the corporate secretary attesting to the board's authorization is generally sufficient.
• Plaintiffs must diligently prosecute their cases. While the rules impose a duty to move for pre-trial promptly, a plaintiff who reasonably awaits resolution of a defendant's own pending motions may be excused from dismissal for failure to prosecute.
• Clerks of court share responsibility for delay. Under the Court's pre-trial guidelines, if the plaintiff fails to move for pre-trial within five days of the reply, the branch clerk of court must issue the pre-trial notice.
• Courts may decide issues on the merits to avoid further delay. The Supreme Court chose to resolve the substantive issue itself rather than remand the case, in the interest of expediting justice.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.